Assessment 1: Project Proposal and Literature Review

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Table of Contents
Part 1: Project Proposal..........................................................................................................3

Introduction..........................................................................................................................3

Types of Processes, Quality and Continuous Improvement Methodologies Used By the

Organisation..........................................................................................................................3

Problem Scenario..................................................................................................................4

Costs/ Benefits/ Risks Associated With Resolving the Problem Scenario.......................4

Project Charter.........................................................................................................................5

Business Need........................................................................................................................5

Project Goals and Metrics...................................................................................................5

Project Timeline....................................................................................................................5

Risks and Constraint............................................................................................................5

Part 2: Literature Review........................................................................................................5

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Part 1: Project Proposal
Introduction
Merck & Co. is one of the renowned names in the pharmaceutical industry of
America. The organisation is situated in Kenilworth, New Jersey and is named after the
Merck Family who founded the group. The organisation generates revenue of US$47.994
billion and has a total asset base of around US$89.800 billion. The organisation completes its
operations with the help of 74,000 employees spread across the globe. However, the
organisation was facing issues linked with waste generation and hence, has to adopt a new
technique that could provide them with a competitive advantage in the market. In this regard,
the organisation has implemented six sigma techniques to reduce their waste and enhance
their performance. I have been working with the organisation from a long time and observed
that there are certain changes that are needed to be brought in the current six sigma technique
as it is proving to be costly hence, its alternatives will be deployed.
Types of Processes, Quality and Continuous Improvement Methodologies Used By the
Organisation
From my experience Merck six sigma technique or is an upgraded version of the lean
six sigma technique. All of the methodologies of the six sigma technique have been
implemented effectively in the organisational structure of the organisation. Merck has also
ensured that all the key aspects of the technique must be in line with the employees of the
organisation. Some of the processes that are included in the technique are:
Decreased Setup Times: The organisation has found that all the setup time is wasteful as they
fail to add much value to the process and tie-up labour and equipment costs are high. Hence,
by handling different procedures with the use of carts and training employees to carry out
their set-up, the organisation managed to slash set-up times from months to hours.
Minimum Production: It is evident that manufacturing products in the bulk lead towards huge
setup costs, larger inventories, huge defect costs, capital costs and unlimited lead times. In
this regard, Merck has managed to do an extraordinary job of making their setup inexpensive
and this has allowed them to manufacture various components of their product in smaller
quantities.
Worker’s Empowerment and Involvement: Merck has not only included six sigma in its
production processes but also its employee’s working techniques. The organisation is forming
the team and also providing them with training to carry out specialised tasks. Teams of Merck
is working on repairing machines of medicines, equipment and are also involved in taking

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care of internal factory work. A team leader or head of a team is provided for every team
whose aim is to perform specialised tasks on time and with efficiency.
Dealers Participation: Merck has been accustomed to working with its dealers using six
sigma techniques and making them an integral part of the organisation. Dealers are one of the
primary tools that allow organisations to decrease their setup costs, machine breakdown,
defects, and inventories and provide them with high-quality components.
Problem Scenario
Merck even with huge success has faced is facing a significant number of issues that
have disrupted their working and procedure in the market. One of the primary issues is linked
with the huge costs of the six sigma process as it decreases costs of overall manufacturing but
is only applicable for high quantity work. But when the demand shrinks then this technique
proves to be costly and hence, puts the burden on the organisations' revenue. During the
corona-virus pandemic, the demand for other medicines reduced and hence, the organisation
has to suffer losses due to its six-sigma technique. Hence, this puts a large amount of burden
on the organisation revenue as to continuously running six sigma approaches.
Furthermore, it has also been found that six sigma requires highly qualified
employees and effective training before employees could get involved in using the technique
to benefit their organisation. However, on some occasions when employees do not possess
the required skills and training then their six-sigma approach could prove to be ineffective as
they do not have the required skills to perform tasks and jobs. As Merck is new in this area
hence, the organisation has faced issues inappropriately training its employees and benefitting
from the technique.
Costs/ Benefits/ Risks Associated With Resolving the Problem Scenario
The amount of capital that the organisation needs to invest will be very high as they
will now need to acquire two techniques namely, six sigma and one traditional that could be
used during a low sales period or when the demand is low. This will need them to develop
completely different two departments in which one will command six sigma and the other
will command traditional technique. The capital that will be invested will be highly
significant hence; this technique should not be advocated by the organisation. However, a
recent development named Capability Maturity Model Integration (CMMI) could be an
alternate way of six sigma that could be used by the organisation. This technique is much
cost-efficient and also highly effective. However, one risk that is associated with the
technique is that it still is in a transition period hence; completely trusting the system could be
disastrous. Thus, the organisation should also look towards the Kaisen sigma technique that

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has become popular in recent times and require less investment and human resource than six
sigma.
Project Charter
Business Need
The organisation needs to reduce the losses that could have occurred due to the high
implementation costs of the six sigma technique in the covid-19 scenario. A new type of
waste removal technique or an upgrade of six sigma will be most vital such as Kaisen six
sigma. Hence, my role is to analyse the benefits and demerits of Kaisen six sigma before its
implementation in the organisation.
Project Goals and Metrics
 The primary goal of the project is to reduce the cost associated with training and other
factors.
 The next goal will be to analyse the benefits of the new method that has been
proposed.
 The metric will be to implement the new technique in the first 6 months and reduce
cost implications by another 6 months.
Project Timeline
The project will take around 1 year to reach its final destination,
Tasks Time
Analysis of the current issues in the current 2 months
six sigma
Analysis of new technique 3 months
The trial period of the new technique 6 months
Implementation of the new technique 1 month
Risks and Constraint
One of the major issues in the implementation of the new technique that I analysed is
that it is new and is not widely accepted across different organisations. This prompts a
constraint in terms of lack of trust for the technique and measures for its implementation
hence will prove to be a significant challenge for me and my team.
Part 2: Literature Review
Merck become one of the recent organisations that focused on reducing their waste
and enhancing their capabilities and effectiveness and gaining a competitive advantage by
reducing their lead production time. Merck in this regard implemented six sigma systems that

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aimed at blending notion, attitude and specific techniques into a structured socio-technical six
sigma system for manufacturing. When every aspect of the technique is followed
appropriately then six sigma of Merck provides highly competent inventory management,
customer satisfaction, material handling and scheduling. That there are several variations in
manufacturing techniques that have evolved during the years taking their stance from six
sigma namely, World Class Manufacturing, Just in Time, Demand Flow Technology and
Stockless Production. All these techniques are found to be a variation of the six-sigma
technique and hence, represent its importance in the modern world. Right from the start when
organisations depend upon mass production, six sigma emerged as a solid stance that could
provide them with the tool to manufacture high quantity goods by reducing their waste and
involving all the employees together.
The organisation has also faced a significant number of challenges when
implementing six sigma in their work. Primarily, during the initial period, the technique just
does not work and their operations did not improve even by the slightest of margins. Though
six sigma is not some magical tool that could ultimately enhance the working of an
organisation rather need dedication, proper application and training. Hence, the organisation
has faced issues due to a lack of skilled labour that could appropriately implement the
technique in their favour. However, its advantages shadow its demerits and hence, it is highly
advocated by the organisation. Merck because of its effective implementation of six sigma
techniques has managed to gain a competitive advantage in the market and now
manufacturing a huge quantity of medicines in quick successions. During the corona-virus
outbreak, there are some medicines whose demand increased rapidly and hence, the technique
allowed them to meet the demand easily.
The leaders of the organisation found three major obstacles that are needed to be
reduced namely, overburden, inconsistency and waste. This requirement generated the need
for two conceptual pillars namely, just-in-time and Jidoka also known as automation. Jidoka
is a part of the six-sigma technique that emphasise automation with a human touch. Merck
leaders realised that automation will reduce their waste but also emphasised that it must be
done with human touch as the minds should be human in order for the organisation to be
competent. The principles that were created through the six sigma approaches of Merck are
continuous improvement, Genchi Genbutsu, Kaisen, respect for people and teamwork. In
continuous improvement, the organisation aims to adhere to the needs of the future and
generate a long-term vision and meets challenges with courage and creativity. The
organisation has learned from its dark time at the start of the 2000s when the organisation

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faced a decline in their revenue by a significant margin and hence, focuses on problem-
solving with solid moves and through creativity. In Kaisen, the organisation looks towards
their future and aim to continuously drive towards innovation and evolution.
The next aspect of Genchi Genbutsu is linked with finding the source of the problem
and then making correct decisions. The organisation with its six-sigma approach emphasised
finding the root of the problem such as from where the waste is getting generated and then
using suitable methods to eliminate the problem or the issue. Furthermore, as from its six
sigma approach, the organisation also emphasised working efficiently with its employees and
building mutual respect for one another. This is important to note that the organisation
realised that its employees are one of the key elements that could provide them with a
competitive advantage in the market. Hence, its six-sigma technique also incorporated the
role of employees such as training and efficient working.
However, some critics of the system stated that it became famous because of its
competent name and culture. Several organisations failed to benefit from the technique and
after investing a significant amount of capital only scummed losses. Organisations that did
not benefit from the technique are basically because they did not know how to use it in their
favour. One of the key elements of six sigma was incorporated in its involvement of all the
employees working in the organisation regardless of their job, title, rank or any other aspect.
Every employee was provided with equal opportunity to provide suggestions in the decision-
making process or during problem-solving sessions. This gave rise to the amount of
innovation that the organisation was originally involved in. The six sigma of Merck has not
been successful in its first year of operation rather it became famous over the years after the
organisation introduced several new tools and techniques in its existing six sigma approach.
The six sigma of Merck provided highly efficient as the organisation managed to adhere to
the delivery schedule and thus, increase customer satisfaction. When customers are found to
be satisfied with the organisation's services then it tends to enhance brand image and
enhances customer retention. The lead time with the help of the six sigma technique was
reduced to a significant amount and hence, it worked in the favour of the organisation.